RALEIGH – Today the North Carolina Senate began to move its 2002-03 budget plan through Appropriations with a floor vote coming soon (see here). As telegraphed during last week’s abortive attempt to roll it out, the Senate budget largely papers over our state’s large and ongoing fiscal problems with one-time revenue shifts and gimmicks.

It is nothing more than a “placeholder budget,” designed not to address the $1 billion-plus structural deficit between what current taxes will generate and what politicians have promised to spend but rather to postpone the day of reckoning until shortly after the next legislative elections.

Let me be more plain. Senate leaders would like to enact a massive tax increase to fill the budget hole. Because their gerrymander has (so far) been thrown out in favor of competitive legislative districts, they do not believe that they can get away with such a plan in 2002. So their preferred strategy is to move money around and pretend to balance the budget, hope to retain power in November, and then hike sales, income, or other taxes in 2003 to make up the difference.

Here’s what I don’t understand, however. They are still hiking taxes in their budget plan, to the tune of about $400 million, by essentially compelling localities to hike the sales tax by another half-cent and by repealing three tax cuts enacted in 2001. So Democrats will still pay a political price for two successive years of tax increases totaling well over $1 billion (last year’s annualized hit on taxpayers was just shy of $700 million). Why they would open themselves up to an additional charge of fiscal irresponsibility, by plugging recurring budget deficits with nonrecurring revenue sources, is not clear to me. On tax increases, if you’re in for a penny, you might as well be in for a pound – or two, or three.

One more thing: in this new budget, Senate Democrats have reportedly responded to the excoriation they received last week for retaliating against Superior Court Judge Knox Jenkins and the Republican-majority Supreme Court. They are now taking away funding and staff from two other Republican judges in Western North Carolina.

Oh, so the budget isn’t specifically partisan. It’s just generally partisan. Thanks for clearing that up.